The Emotions of Math - Part II

Stock options, while not stocks, cannot exist without their underlying parent. We are comfortable with this fact; the underlying has a direct influence on its derivative. Yet when it comes to statistics, math, etc…we treat these units of measurement as if they are not a derivative of the things, persons, or events they represent. This is a mistake. Math, in all its forms, is necessarily a derivative of the pre-existing events they seek to permanently quantify. Stats are the children of emotions, and can never be totally void of their direct ancestry.

Look at it this way-how many stock charts have you studied for IPO's coming to market in the near future? None, why? Because stats are results not causes, and can never cause results. Now there are tons of emotions in the halls of corporations preparing to go public. Founders have created product, marketed product or service, created strategic partnerships, sold product, reached critical mass in the private sector, and now prepare to go public where all owners will become very liquid, very quickly.

This truncated scenario is full of emotions...now here comes the trader, the last one in line seeking to acquire a small mountain of money from looking at the result of a string of emotions that the company founders have had for years. Everything is emotionally driven, show me historical technical analysis on stocks that don't yet trade and then you'll be onto something.

The quicker one understands the role of emotions without becoming overly emotional about this fact, the better trade or investment decisions can be made.

Math existed before we discovered it. It then follows, there may be higher laws yet undiscovered that will trump or atleast dilute current math concepts.

Gravity did not come into existence when we agreed, it has always been. Simply put, truth welcomes believers, but doesn’t require any. This would suggest that 2+2 equals 4 not because the universe says so, but because those are the components of counting, man has created for our organized usage. Does 2 + 2 equal T7^ or Z1? Well, unless you know undiscovered languages, you wouldn't know. In other words, we define everything relative to our human frame.

If you view emotions as water, everyone has them. From water some get ice, some steam, some irrigation, some sanitation, some energy, etc…the question is then, are any of these derivatives “pure” or better said which of the water derivatives are absolutely, inherently void of water, or at minimum the influence of water? None.

How does this concept directly influence the trader or investor? Check back for the concluding Part III.